KARACHI: China is in talks with Pakistan for building one of the largestoil refinery in Pakistan.
State-run Pakistan State Oil (PSO) is in talks with Power China for apartnership in an estimated $8 billion refining project in the country,industry officials said on Wednesday.
An agreement is expected to be signed ‘very soon’, said an official,however, he had no firm details on the particulars of the agreement.
Prime Minister Khaqqan Abbasi witnessed the signing of memorandum ofunderstanding (MoU) between PSO and Power China for the construction ofup-country deep conversion oil refinery and laying of crude oil pipelineduring a visit at the Boao Forum recently.
The refinery would likely have a capacity of 250,000 barrels/day (bpd) to300,000 bpd/day.
Officials said the projects aim to supply uninterrupted crude oil andfinished products in Punjab, Khyber Pakhtunkhwa and other parts of thecountry.
Moreover, the pipeline has been designed to avert accidents and maintainsmooth supply to other installed refineries.
“The installation of the refinery in Pakistan would be a good omen for usas nearly 70 percent of the needs of petroleum products have been metthrough imports,” said analyst Abdul Azeem at Spectrum Securities.
“It would strengthen the earnings of PSO, and in addition would help reducethe volume of the import bill for petroleum products.”
Currently, the country has five refineries having combined capacity ofaround 404,000bpd.
Analyst Tahir Abbas of Arif Habib Limited said the signed MoU is anon-binding document, “it is yet to see when the project wouldmaterialise”. “But the new refinery should have latest technology andproduce less furnace oil.”
Currently, the refineries in Pakistan are producing around 25 percent to 40percent of furnace oil from their product mix, which has resulted incolossal sufferings following a government decision to close down powerplants running on furnace oil back in November 2017.